Kodak says Apple, FlashPoint want to “delay and derail” patent sale

Is Apple trying to make Kodak's bankruptcy proceeding as difficult as possible?

Kodak is accusing Apple and FlashPoint Technology of attempting to block Kodak's sale of its patent portfolio as part of its Chapter 11 bankruptcy proceedings. The photography giant has now filed a new lawsuit against the two companies, arguing that Apple and FlashPoint are deliberately taking advantage of Kodak's bankruptcy situation by attempting to "delay and derail Kodak's efforts" to sell its Digital Capture Portfolio by claiming that they own 10 of the claimed patents.

According to Kodak's complaint, filed in the US Bankruptcy Court for the Southern District of New York, Kodak and Apple worked together between 1992 and 1994 to develop "certain digital camera technology" under Apple's code names Adam, Aspen, and Phobos. In December of 1994, the companies entered an agreement regarding Aspen and Phobos that said each party retained ownership of its own intellectual property.

That same month, Kodak filed an application with the US Patent and Trademark Office (USPTO) for one of the main patents involved in the dispute (referred to as the "'218 patent") and subsequently filed applications for nine other digital imaging patents. All of the patents ended up being issued to Kodak between 1996 and 2010.

Kodak eventually decided to file an International Trade Commission (ITC) complaint against Apple and HTC in January of 2012. At that time, Kodak essentially argued that the way in which iOS devices—as well as a number of Android devices from HTC—allowed users to take, select, and send photos over the network infringed on Kodak's patents. Then, Apple started claiming that it, in fact, owned several of the patents Kodak was trying to assert, which was quickly followed by similar claims from FlashPoint. Kodak also points out that Apple brought the '218 patent into dispute for the first time in 2010 as part of a different ITC investigation.

Apple's position is that Kodak breached the 1994 contract between them, not to mention that Apple believes it owned the patents in the first place. FlashPoint claims it entered an agreement with Apple in 1996 that would then assign any rights that Apple might have owned to FlashPoint instead.

Indeed, the claims are complicated, and Kodak accuses Apple of being the "single largest infringer of patents in the Digital Capture Portfolio and also a potential purchaser of those patents." The company appears to believe that Apple is deliberately trying to cause a ruckus in Kodak's attempts to sell the patent portfolio, and it may even be abusing its "substantial cash position to delay as long as possible the payment of royalties to Kodak."

"Apple and FlashPoint are seeking to benefit from Kodak’s difficult financial position, which will be exacerbated if the Debtors cannot obtain fair value for the patents in the Digital Capture Portfolio," Kodak wrote in its complaint. "Any interference with the planned [patent portfolio] sale will cause obvious harm to the Debtors and all of their stakeholders."

Apple has not commented publicly on the new lawsuit, but Kodak is still holding out hope that it will auction the patents this coming August, according to Reuters. If that happens on schedule, the winning bidder will be announced on August 13. But if Apple has its way and continues to claim that it owns 10 of Kodak's patents, there's no telling when that date will come—if it ever does.